Quebec explosion highlights risk of oil transport

By MATTHEW DALY Associated Press

Posted:
07/08/2013 01:30:05 PM MDT

Updated:
07/08/2013 02:52:23 PM MDT

Click photo to enlarge

Searchers dig through the rubble for victims of the inferno in Lac-Megantic, Quebec, Monday, July 8, 2013, after a train derailed igniting tanker cars carrying crude oil early Saturday. Five people are confirmed dead and forty more are listed as missing.

WASHINGTON—The explosion of a runaway oil train in Canada highlights the risks that come from transporting oil, no matter the method.

Spills from rail cars occur more frequently than from pipelines, but tend to be smaller.

The Quebec disaster on Saturday, which killed at least five people, underscores a trend in which North America's oil is increasingly transported by train, as plans for new pipelines stall and existing lines struggle to keep up with demand.

Since 2009, the number of train cars carrying crude oil hauled by major railroads has jumped nearly 20-fold, to an estimated 200,000 last year.

Much of that comes from the Bakken oil patch in North Dakota and Montana, including the oil that spilled Saturday in Quebec. Because of limited pipeline capacity in the Bakken region and in Canada, oil producers are increasingly using railroads to transport oil to refineries.

The Canadian Railway Association estimates that as many as 140,000 carloads of crude oil will be shipped on Canada's tracks this year—up from 500 carloads in 2009. The Quebec disaster is the fourth freight train accident in Canada this year involving crude oil shipments.

Canadian Prime Minister Stephen Harper, who has been pushing the Obama administration to approve the controversial Keystone XL oil pipeline from Canada to the U.S. Gulf Coast, has called railroad transit "far more environmentally challenging" than pipelines.

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Harper says the 1,700-mile Keystone project, which would carry oil derived from tar sands in western Canada to refineries in Texas, is crucial to his country's economic well-being.

"The only real immediate environmental issue here is, do we want to increase the flow of oil from Canada by pipeline or via rail?" Harper said during a visit to New York in May.

Fadel Gheit, an energy analyst at Oppenheimer & Co. Inc., said it would be a mistake to view the Quebec disaster as a boost for the Keystone project.

"It's almost jumping from the frying pan into the fire. I look better because the other guy looks worse," Gheit said Monday.

Gheit, who supports the pipeline, said Harper and other pipeline proponents will need to persuade the Obama administration on the project's merits, rather than the dangers of rail.

"If I have a choice of importing oil from Canada, Venezuela or Saudi Arabia, where would I feel much better with?" he asked, calling the answer obvious.

Kate Collarulli of the Sierra Club said pitting railroads against pipelines was a false choice.

"To say we have to choose between rail and pipelines is cynical and defeatist," she said, calling oil a "dangerous fuel" no matter how it is transported.

A report by the U.S. State Department this spring said that development of tar sands in Alberta would create greenhouse gases, but makes clear that other methods of transporting the oil—including rail, trucks and barges—also pose a risk to the environment. For instance, a scenario that would move the oil on trains to mostly existing pipelines would release 8 percent more greenhouse gases such as carbon dioxide than Keystone XL, the report said.

Even without the pipeline, extraction of oil from the tar sands is likely to proceed, the report said.

The Association of American Railroads, an industry trade group, declined to comment on the Quebec disaster, citing the ongoing investigation and the loss of life. But in a "fact sheet" produced before the July 6 explosion, the group said that 99.9 percent of all rail-bound hazardous materials shipments reach their destination without incident. Over the past 10 years, the number of rail cars containing hazardous material that were damaged or derailed declined by 38 percent, according to the Federal Railroad Administration.

The Association of Oil Pipe Lines called pipelines the safest way to deliver crude oil and petroleum products. In 2012, U.S. pipelines transported over 13.5 billion barrels of crude oil, gasoline, diesel and jet fuel across the nation, with 99.99 of those reaching their destination safely, the group said.

Large mainline pipes, like the proposed Keystone XL, historically have faced an incident rate of 0.00025 per mile-year, the group said.

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